Ophir Energy to commence fourth phase of development at Bualuang, Gulf of Thailand

LONDON -- Ophir Energy has announced that a Final Investment Decision has been taken to commence the fourth phase of development at Bualuang oil field in the Gulf of Thailand. The total investment is forecast to be $145 million from now until 2020, and is expected to deliver NAV growth of upwards of $50 million (NPV10) representing an unlevered IRR of 40+%. The development will consist of a 12-slot, bridge-linked wellhead structure with additional power generation. It will include the drilling of up to 14 wells and an expansion of the water disposal capacity on the Bravo platform.

ERC Equipoise, Ophir’s reserves auditors, have provided a letter of comfort to the board that forecasts that the development will convert 9.2 MMbbl of contingent resources to reserves. First oil is expected in the second half of 2018.

Through a combination of additional debt leverage and the Thai fiscal terms, the project is expected to start delivering cumulative positive cash flows from the start of 2019.

Under the company’s remuneration scheme this FID decision is classified as a NAV event as it is progress towards monetization of an asset. While this event itself increases Ophir’s NAV toward the benchmark, it does not of itself trigger a remuneration reward to staff.

2017 infill drilling program

The Vantage Drilling Topaz Driller jack up rig is on location at Bualuang field and has commenced operations on the 2017 infill drilling program. This program consists of two development wells and one well targeting untested prospective resources in a near-field step-out location. Abandoned well stock is to be recycled to target the three new locations with the goal of the development wells growing production by around 1,400 bopd. The cost of these development wells will be c. $12 million and is expected to add $23 million to the NPV of the project and payback within 12 months. Production year to date from the field is averaging 8,100 bopd.